A successful and flourishing business is all about how well its operations and systems are established and managed. Automation is the key to development and growth. Now, there are multiple components to a business one of which is also financial management.
To be honest, this could be one of the trickiest parts of handling a business because, in a way, your business is highly dependent on how well you manage your money.
“Every decision you make in a business has financial consequences.”Barbara Vrancik
For the initial phase, you can manage the finances manually but eventually, you are going to need an efficient tool to save you the man-hours and make the process easier and precise for you.
In this blog, we are going to talk about some of the best business finance tools and business accounting tools along with the pain points they help with so that you can choose the one that is perfect for you.
But before that, let’s see what exactly business finance is and how much does it matter if you use a tool or not. As the owner of a business, it is your responsibility to look after the financial health of your organization even though your business is more of something you do for your passion and not for the money alone.
You still need to keep track of all the transactions and make sense of everything to keep your business running smoothly. But it is also not necessary to invest in heavily expensive tools when your business is just starting out, right?
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When should one invest in a business finance tool?
- When it gets really time-consuming
- When the processes get complex and require a lot of attention to the details
- When inconsistent and sudden tasks start overwhelming your in-house finance team
- When you start spotting numerous errors in the numbers
- When the whole bookkeeping process gets vague and you can’t get a clear picture
Additionally, there’s always a myriad of tasks going on in the background, e.g. generating invoices, approving budgets, releasing payments, etc. Doesn’t it sound too daunting for you to be dealing with it single-handedly? More than that doesn’t it pose a threat to create mismanagement on a larger scale if you keep doing everything on your own?
As Benjamin Franklin said, “Beware of little expenses, a small leak will sink a large ship.”
Similarly, you don’t want to cause yourself thousands of dollars of harm, just because you wanted to avoid employing a tool to help you out.
What benefits can you reap by employing a business finance tool?
- You can manage your cashflow easily
- Super easy invoicing and billing
- Streamlined bank reconciliation
- Easy method for tax compliance
- Helps with inventory management
- Comes in handy while generating reports
- Helps with project management and budgeting
- Gives you an account of due payments and streamlines the process for the same
A lot of businesses are still attached to the traditional way of tracking and planning finances, but trust us, using an efficient tool will help you overcome each and every drawback of the traditional financial management systems.
In addition to that, you can avoid losing important data since it is all stored online. Not only that, but good software can help you deal with the basic most yet unsolved problems of business finance. E.g. the traditional spreadsheet method won’t be an efficient one while you’re calculating the expenses (salary, payments, etc) by the hour.
It becomes really tedious to keep track after a while, and it takes time to approve those logs and draw conclusions from them to raise invoices. Alternatively, these smart finance management tools can help us generate automatic invoices from the time we log in by using the tool. Easy, right?
Enough about the “why”, let’s go to the “how” of efficient business finances. We have prepared a list of tools and software you can use to streamline and plan your finances. Read on!
What are the best business finance accounting and bookkeeping tools available?
An all-in-one deal, Zoho’s finance plus is one of the best tools out there. It helps you with each and every aspect ranging from invoice and expense management, tax compliance, to inventory management and accounting. Each feature of Zoho is very flexible, allowing you to create scalable processes.
Particularly famous for making the user experience seamless, Zoho is a pretty good choice from anyone who is a solopreneur to people who are running MSMEs. It gives a two-week free trial and the charges thereafter start from $149/month.
A pretty standard tool trusted by numerous users, Quickbooks is a feasible tool for small and medium businesses in terms of bank reconciliation, tax compliance, payroll, and cash flow management, along with advanced reporting.
The specialty of this tool is the efficient management of high-volume, high-frequency transactions. QB is just the tool for booming mid-sized or larger businesses. Starting from a plan as little as $10/month, Quickbooks offers multiple customizable options when it comes to pricing.
Serving with a perfect assortment of accounting and invoicing tools, Freshbooks offers a lot of value by recording each transaction (online or offline) and keeping a track of the same on visually appealing and easy-to-understand dashboards. Recommended for small businesses, this tool is a piece of cake to work with.
What makes it even more special is that they offer a support team that is dedicated to solving your issues, round the clock. The 30-day free trial is yet another perk that one should factor in before committing to the tool. The price of the subscription ($7 to $25) however, is quite less in comparison to the value it provides.
Freshbooks is a great tool if you want to eliminate the frustration of having to keep an account of your income and expenses manually. The advanced tracking features of Freshbooks help us analyze and follow every income stream, thanks to the super-simple and easy-to-use UI.
HMRC approved and MTD compliant account book organizer to save your time while filing the returns at the end of every financial year.
- Invoice generation
- Track of expenses
- Accounts handling
- Online payment gateway integration
- Time and mileage tracking in every plan
- Email, chat and call support
- Excellent invoicing services
- Does not provide quarterly tax estimations
An easy-to-use, super simple tool for creating recurring invoices, payroll management, bank reconciliation, etc. It is built by keeping in mind the overall needs of financial management, and hence, offers numerous features along with integrations and reports.
The best thing about Xero is that it allows unlimited users per plan which is not very common when it comes to such tools. And the customizations are so flexible that one can even control feature access by setting certain levels of user permissions.
Available in over 180 countries, Xero is a well-renowned tool that is best suited for mid-sized and large-sized businesses. Yet another attractive feature of this tool is the way it helps you learn the use of every feature by adding necessary videos, or articles on the top of every page.
The UI is super simple and while the tool does have a steep learning curve, they’ve made sure that the users get a hang of it easily. The cost of this software starts from $20/month but it is quite expensive when you get bigger packages.
5. Wave accounting
If you are into a small service-based business, Wave is one of the best free platforms for accounting and invoicing. If you want payroll processing or credit card processing, you might have to pay a small fee. It comes with limited features, but again it is free, and it is well-suited for small businesses that are not ready to invest in a tool yet.
You can track your transactions, account for sales tax, can work in collaboration with partners, automate recurring bills and invoices, and maintain multiple businesses on the same account. For a free tool, Wave offers a lot. However, it is not scalable and does not offer many advanced features.
Sage in itself is a huge enterprise resource planning software development organization that also develops tools for business applications. It offers numerous resources including but not limited to project management, accounting, front line control, etc.
It also offers a myriad of options for businesses to manage their finances in an easy way by providing multiple payroll management, expense tracking and, invoicing features. Useful for businesses of all kinds and sizes, Sage is a globally known company with its cost starting from merely $10/month.
7. Bench accounting
Based out of Canada, this tool is suitable for small businesses not looking to scale anytime. It offers bank reconciliation, financial statements, and transaction tracking. Basically, it is a good option if you are a solopreneur with straightforward finances or at least a small business with simple transactions. It is efficient as compared to other accounting tools, gives accurate and fast results, and saves you a lot of man-hours.
8. Float apps
Specially designed for cash flow management and financial forecasting, Float is particularly helpful for business owners. It helps them project their finances in various directions and choose the best way to manage them and achieve their goals. After a free trial, the pricing packages start from $59 a month and go up to $249.
With its expert bookkeeping and payroll management tools, Surepayroll is a flexible tool with seamless integration gateways and excellent tax handling features. It is also a resourceful option for employee management. With a two-month-long free trial, Surepayroll has a distinctive pricing model thereafter.
They charge $29.99 as a base fee in addition to $5 per month, per employee. This is for the full-service package. They also offer a self-service package that costs $19.99 a month plus $4 per employee. The only disadvantage of this tool is the variable charges and other internal expenses, it is otherwise a good option for businesses.
What parameters should be considered while employing a business finance management tool?
Now, while there are all these and more options available in the market for the best business finance management tool, there are a few things you should factor in before you zero in on one software.
- Your budget: It is not very wise to spend a huge amount on finance management software if you don’t have enough budget. Figure out what is your upper limit for the number and type of features you require and work out the best option for your business.
- Scalability of the tool: While you might be starting out as a small business, you should also keep future scenarios in mind. If you are confident that you are going to scale your business in the coming months, you need to have a finance management tool that is also scalable enough. It is going to be difficult to migrate to another tool when you have already invested heavily in one.
- Security: You don’t want to have your sensitive financial data going around publicly, do you? Choosing a tool that allows you to set restricted access and possesses a strong defense against that data breach is the one you should always go for.
- On-premise or cloud: While a cloud-based tool is usually the better choice to go with, you need to consider which option works best for you as both of them have their own pros and cons. Cloud-based systems are easy to access from anywhere and cost less as compared to on-premise tools, but with the latter type, your data is locally hosted and you possess better control over it.
Lastly, each tool is unique on its own. It is up to us to identify our needs precisely and employ a tool that covers all our requirements. Every business needs financial management and planning. In fact, every business deserves a dedicated tool or resource for the same.
It’s our analyzing skills that help us pick the best one for our business. Once you start preparing a list by emphasizing crucial requirements, the next step would be to match those requirements to available tools. The one that fits your budget along with these requirements, is the one you should keep!
What is the best business finance tool?
Quite frankly, the tool that fits your budget and contains all the features you require. Some of the tools listed above, i.e. Sage, Float, Surepayroll, Xero, Quickbooks, Zoho, etc. are some common tools used nowadays.
Do I need an accountant if I am using a finance tool?
It is always good to have guidance and support from an expert when it comes to financing. You can seek their help for getting started with the tool, and it is not a bad idea to have your tax returns reviewed by a professional.
Can I use Excel as accounting software?
Absolutely! Excel has always been an efficient, easy, and appropriate accounting software for small businesses. However, one needs to have an advanced tool in place in order to handle a medium-sized or larger business.